The median price for homes also rose to $160,100 in 2012 from $152,400 the year before. That's an increase of 5.1 percent.

"San Antonio is growing so much in every direction," Gragg said. "Sales are strong in all areas." While it's hard to tell at this point, he added, he expects the market to remain steady for the year.

2012 ended on a strong note.

In December, there were 1,548 home sales, a nearly 9 percent jump compared to the same period the previous year. The median home price also rose during the month to $160,200, a 4.7 percent increase from December 2011.

Mortgage interest rates continue to hover around 3.5 percent and are expected to remain at that level throughout the year, giving prospective home owners more buying power, Gragg said.

But as home prices keep creeping upward, the sellers are finding themselves in the driver's seat, a position that buyers occupied the last few years.

"Last year, the lending market was not quite as tight, and it will be easier for the buyer in 2013," said Jackie Arnette, associate broker at Keller Williams Realty Legacy Group. "But we're getting to the point where sellers can sell their homes quickly. And with the (home) values going up, buyers won't be able to buy much house."

Historically, San Antonio's rental market has been strong, said Angela Shields, SABOR's president and CEO. Last year, rental homes in the area were at about 97 percent occupancy and the average rental-home price was at $1,333 per month, up nearly 5 percent from the previous year, SABOR data shows.

Rents are expected to continue to rise, pushing more people toward homeownership, Gragg said.

While most homes sold cost $199,000 and below, the market saw a 3 percentage-point uptick in the number of homes sold in the $200,000 to $499,000 range from 2011 to 2012, according to SABOR.

"Again, with the interest rates so low, people are looking to make a change," Arnette said. "The $110,000 to $150,000 homes will continue to be a big part of the marketplace. But higher to mid-range homes will see more business."